By Robert King | Jul 24, 2020 4:06pm
President Trump is
expected to sign four sweeping executive orders intended to lower drug prices
and resurrect measures to constrict Medicare rebates, tie prices for certain
Medicare drugs to overseas prices, lower insulin prices and allow the
importation of drugs from Canada.
Trump touted the
executive orders during an event on Friday, highlighting measures such as the
drug rebate rule that his own administration previously scuttled.
He also proposed a
measure similar to an international price index that was proposed by HHS in
2018 but never became a federal rule. The proposal would tie prices for
certain Medicare Part B drugs to an average paid by countries overseas, which
get the same drugs at a lower price thanks to single-payer healthcare programs.
"We’re finally
going to use that incredible power to achieve a fair and lower price for
everybody,” he said Friday.
Trump said that his
administration plans to meet with drug companies next week and depending
on those negotiations, then he could drop the international drug index
order. The companies have until Aug. 24 at noon or the index changes kick in.
Health and Human
Services Secretary Alex Azar told reporters Friday that if the drug companies
don't come forward with a comprehensive plan to address pricing concerns then
the administration will move forward with the rule. But he declined to give a
timetable on when a proposed rule would be released or how else the agency
would move forward.
"We will be
discussing at a later date the procedural vehicles for how that would
happen," he said.
Trump did not mention
a similar parley for pharmacy benefit managers that construct Medicare Part D
drug rebates.
The orders touch on
earlier proposals that have not gone anywhere in Trump’s administration.
Azar said that the
order was meant to show the seriousness of the administration on tackling drug
prices.
"What the
president did today is make clear these are the policies of his administration.
These will happen. He ordered them to happen," he told reporters, declining
to elaborate on timing.
The Trump
administration released in 2018 a rule targeting Medicare Part D rebates. The
rule would have eliminated the safe harbor for rebates that drug makers
offer to PBMs and Part D plans from federal anti-kickback laws and instead
create a new safe harbor for point-of-sale discounts.
But the rule was
scuttled after intense lobbying from the insurance and PBM industry and amid
concerns from the White House over whether it would raise premiums for seniors.
The executive order calls
on HHS to revive the rule. The one major change is that it also calls on HHS to
confirm that the rebate rule won't increase federal spending or hike
Medicare Part D premiums on seniors.
The IPI model was
proposed back in 2018 as a notice of advance rulemaking, but it never was
issued as a proposed rule after vociferous opposition from the pharmaceutical
industry and even opposition among congressional Republicans who saw it as a
socialist price cap.
The model would tie
the prices for certain Medicare Part B drugs to the average paid by several
countries such as Germany and Japan.
The administration has
also been working with states such as Florida on a method to enable importation
of cheaper Canadian drugs into the U.S.
Last year HHS and the
Food and Drug Administration made several moves towards importation. The agency
made a notice of proposed rulemaking to create a pilot project that allows
certain states, wholesalers and pharmacies to import drugs from Canada.
The project would be
limited to certain drugs due to a restriction in federal law, which would mean
insulin wasn’t included.
The FDA also would put
out guidance to manufacturers of FDA-approved drugs on how they can offer a
lower price than what their current distribution contracts require in order to
compete with the imported drug price.
The
administration released a proposed rule outlining
the pilot project back in December.
The executive order
would also grant waivers for consumers to personally import drugs from Canada.
Currently personal re-importation is illegal but the FDA traditionally turns a
blind eye to it.
However, the agency
has previously been concerned about safety as it cannot verify that drugs
re-imported from Canada are safe or effective.
Canada also has
vehemently pushed back on any importation into the U.S. over fears that its
supplies could be in jeopardy since the U.S. is a much larger market.
Another executive
order focuses on insulin prices, which was the focal point of a payment model launched by the Centers
for Medicare & Medicaid Services earlier this year.
The executive order
would ensure 1,000 community health centers would get insulin at a discounted
rate under the controversial 340B drug discount program, which requires drug
companies to give discounts to safety net hospitals in exchange for Medicaid
participation. The order also applies to certain types of injectable
epinephrine.
The health centers
would be required to pass the discounts along to patients to get insulin, which
has ballooned in price over the past decade, at a lower rate.
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